High Court denied bail to GST Audit Superintendent in alleged bribe case

High Court denied bail to GST Audit Superintendent when trap proceedings were followed as per rules though bribe money was recovered from wash room

ABCAUS Case Law Citation:
ABCAUS 3203 (2019) (12) HC

In the instant case the applicant (GST Superintendent) had moved a bail application under Section 439 of the Code of Criminal Procedure (CPC) 1973, praying enlargement of the applicant on bail in alleged bribery case registered under Section 7 of the Prevention of Corruption Act, 1988.

Earlier, a complaint was made by a Proprietor to the C.B.I, Anti-Corruption Branch stating that his firm took contract of electricity work of different departments, which had a Service Tax Registration.

The complainant was apprised by a letter issued by the Assistant Commissioner, Central Goods and Service Tax that a team had been constituted for conducting audit of his firm under the leadership of Audit Commissioner.

The applicant called the proprietor on phone to his office and demanded a sum of Rs. 8 lakhs as bribe in order to get a favourable audit report, to which the applicant stated that he did not have papers ready and then, the applicant told him that he should not worry about that.

But thereafter, the informant/complainant showed his inability to satisfy his demand and assured that he would meet him after he completes his papers, but even then, the applicant told him that he would have to pay the bribe amount, failing which, he would impose much higher penalty than Rs. 8 lakhs.

Thereafter, the applicant had various telephonic conversations with the informant and ultimately, he brought down the amount of bribe to Rs. 5 lakhs on phone.

On this complaint, trap proceedings were conducted against the accused-applicant by the C.B.I. The investigation report revealed that:

After completion of pre-trap proceedings, the C.B.I. team moved to the office of the applicant. Before sending the complainant and the witness to the accused-applicant, the complainant was equipped with DVR for recording the conversation with micro-SD card inserted in it.

The complainant and the witnesses entered into the office premises and found the accused-applicant present in his chamber on the ground floor, in which he was sitting as Superintendent. The witness was not allowed, but the informant was allowed to enter.

When the applicant was present in his ground-floor chamber, he demanded the bribe there, by gesture. Then the complainant placed the bribe money before him upon table, whereafter, the applicant gestured/directed the complainant to take the bribe money back and put the same in his pocket and accompany him.

Then, the applicant took the complainant to another Room where he used to sit as Superintendent (Audit), where, after some exchange of words, the applicant opened the top drawer of the table and asked the complainant by gesture of left hand to keep the bribe money in the drawer.

The complainant did accordingly. Thereafter, the applicant further demanded the remaining amount of bribe of Rs. 2 lakhs. After acceptance of the bribe amount, the complainant came out and went to the ground floor to inform the C.B.I. team. In between, the applicant concealed the bribe money in an electric switch board of washroom, which was situated at the end of the gallery.

Thereafter, the C.B.I. team entered into the office and on being asked, the applicant did not tell as to where he had concealed the said money. However, the bribe money was recovered and after its recovery, the applicant accepted to have demanded the same and also reasons for concealing the same.

The C.D.R. of the applicant was collected, which revealed that the applicant and the complainant had spoken over phone a number of times on the dates mentioned by the complainant.

The investigation further revealed that one Inspector and a member of the audit team headed by the accused-applicant had prepared letter. In absence of the applicant, the said letter was moved through Superintendent, for the signature of Assistant Commissioner, Circle Incharge, for seeking 26 documents from the assessee. The investigation further revealed that the said Inspector claimed that all the documents like unsigned balance sheet, profit and loss account of various years, were provided to him by the advocate of the assessee.

After receipt of the documents, the Inspector calculated the tax evasion and found penalty of Rs. 82,300/- on account of delay in filing S.T.-3 returns, for short payment of service tax of Rs. 43,309/-, penalty of Rs. 6,496/- on short payment of service tax, interest on short payment of service tax Rs. 27,795/-…..etc. The total tax evasion and the interest as well as penalty stood at Rs. 9,28,123/- and the audit was pending in the case till the date of offence.

Investigation further revealed that the said Inspector put up desk review before the accused-applicant for taking approval from competent authority for conducting audit. The desk review and audit plan were signed by the Inspector as well as by the accused-applicant Superintendent, Deputy Commissioner, Additional Commissioner, all from G.S.T. Audit Commissionerate. The audit plan was approved, while field audit was pending and after that, the accused-applicant had to submit his report, for which he demanded bribe.

Further, it was mentioned that sanction for prosecution was awaited and the same would be filed after having received the same from competent authority.

Against the above evidence, the counsel for the applicant argued that no recovery had been made of bribe amount from the accused-applicant, the same was stated as having been recovered from electric switch board in the washroom, which was at the other end of the gallery and therefore, such place could not be held to be within the periphery of his domain for holding the accused-applicant guilty of bribe being recovered from his possession. It was alleged that the applicant had been falsely implicated due to animosity against the complainant, against whom, several complaints were made.

It was further contended that neither the trap team nor the shadow witness personally heard or saw the demand of the alleged bribe being made or the bribe money being handed over; rather on the contrary, the informant was stated to have kept the bribe money in the top drawer.

High Court denied bail to GST Audit Superintendent in alleged bribe case

The Hon’ble High Court opined that as per the evidence, the trap proceedings were followed in accordance with the rules, which involved use of phenolphthalein process etc. Hence, at this stage, it would not be fair to disbelieve the proceedings of trap, particularly in a case where a huge amount of Rs. 3 lakhs was said to have been recovered.

The Hon’ble High Court pointed out that the evidence also revealed that there was the charge with the accused-applicant of the proceedings to be initiated against the informant with respect to assessing his tax, regarding which audit was to be conducted and therefore, it could not be denied, at this stage, that there was strong possibility of the involvement of the accused-applicant in the present case.

Therefore, the Hon’ble High Court did not consider it proper to enlarge the applicant on bail, as of now. As a result, the application filed by the applicant was rejected.

Download Full Judgment Click Here >>

read latest abcaus posts

----------- Similar Posts: -----------

Leave a Reply